Ex-CFO of Met Council pleads guilty in kickback scheme

May 6, 2014 3:15pm

(JTA) — Herbert Friedman, the 80-year-old former chief financial officer of the Metropolitan Council on Jewish Poverty, pleaded guilty in New York state court to bilking the charity of $250,000 as part of an insurance kickback scheme.

Under the terms of the plea bargain, Friedman will spend four months in jail and pay $775,000 in restitution. Friedman is the fourth individual to plead guilty in the $9 million scheme, which dated back to 1992, and whose discovery last August shook the politically well-connected charity, which is based in Manhattan.

The Met Council’s two previous CEOs, William Rapfogel and David Cohen, have already pleaded guilty in the scheme, which involved kickbacks for inflated insurance payments, as has insurance executive Joseph Ross. Rapfogel, who had been a close ally of New York State Assembly Speaker Sheldon Silver, accepted a plea deal calling for 3-to-10 years in prison and restitution of $3 million. Silver has not been implicated.

Friedman served as the chief financial officer for the organization under Cohen, who initiated the kickback scheme in 1992, and subsequently under Rapfogel, who took over as the charity head in 1993. Friedman, who left the Met Council in 2009, was intimately involved in the scheme, as he oversaw all payments to outside vendors, according to a joint statement issued by New York State Attorney General Eric Schneiderman and New York State Controller Thomas DiNapoli.

“Herb Friedman abused his position of trust to help steal millions of dollars from a taxpayer-funded charitable organization — one dedicated to serving some of New York City’s poorest and most vulnerable residents,” Schneiderman said in a statement.